Mitigating impact of climate-related risks in the hospitality industry

The private sector, with the support of the government, must embrace sustainability - A strong commitment towards environmental, social and governance (ESG) can be used as a powerful competitive advantage for hospitality companies, especially those economic operators that are already implementing measures to fulfil the EU’s intended climate objectives, said Clint Flores, head ESG Department at Bank of Valletta, during the presentation of the MHRA Hotel Performance Survey for the second quarter of 2023.

The survey, supported by BOV and Deloitte, is based on data collected from hotels and other stakeholders. Statistics are predicting that tourist arrivals for the year 2023 will surpass the 2019 record.

Flores said that the private sector, with the support of the government, must embrace sustainability more than ever, as the hospitality industry cannot continue to impinge on the environment to the detriment of current and future generations.

He added that the hospitality industry must set science-based target initiatives and systems in place to track and reduce carbon emissions. The reduction in energy use entails a dual benefit for the environment due to lower CO2 emissions as well as cost effectiveness in reducing energy bills.

“As a super regulatory power, the new EU’s rules will affect the hospitality industry including the transportation and other modes of travel,’ Flores said.

“The increase in the influx of tourists is constantly exerting pressure on Malta’s infrastructure, including water, energy and waste systems. This will be more visible in the coming years due to the physical risks associated with climate change.”

He said hoteliers must be more innovative and devise systems and operations to reduce the impact on these elements by introducing renewable energy structures to mitigate climate change, as well as introducing water catchment and purification systems when designing new hotel structures to adapt to climate change. Similarly, he said, waste recycling and other alternatives to transit to sustainable energy systems must be explored.

“These practices must aid in the transitioning to a circular economy and reduce the impact on the main systems.”

Flores highlighted that one of the advantages of Malta’s small size is proximity.

“This can play a determining role if the main players in the industry come together with a collective aim to become future-proof and collaborate towards industry-wide initiatives,” he said.

“Decreasing the impact on the environment helps achieving the UN Sustainable Development Goals faster, while ensuring that stakeholders and the public are properly informed about their initiatives to fulfil their corporate responsibility.”.